Telefonica to sue Millicom over aborted Costa Rica purchase

Nieuws Algemeen Costa Rica 30 APR 2020
Telefonica to sue Millicom over aborted Costa Rica purchase

Telefonica is set to take legal action against Millicom in US courts over the aborted sale of its subsidiary in Costa Rica, reports El Pais, citing a submission to market securities regulator CNMV. Millicom reached an agreement to acquire 100 percent of Telefonica’s mobile telecommunications assets in Costa Rica for USD 570 million back in February 2019, a transaction approved by Costa Rica’s telecom regulator Sutel last September, but the Spanish operator is now claiming that Millicom has refused to proceed with the closure, a delay it considers to be "a breach of the terms and conditions established in the contract."

The report said Telefonica intends to file a lawsuit against Millicom as soon as US courts resume non-emergency procedures to demand compliance with the agreement and compensation for any damage caused. However, Millicom subsequently issued a statement strongly refuting Telefonica’s allegations regarding the conditions for closing the Costa Rica deal. It added that “in the event that the pending regulatory approvals for the transaction are not issued by 01 May 2020" it intends to terminate the agreement in accordance with the terms thereof.

Millicom also said it intends to vigorously defend itself against any action brought by Telefonica in the matter. The company closed deals to acquire Telefonica’s operations in Panama and Nicaragua last year but is now claiming it needs the permission of Costa Rica’s Comptroller-General to finalise the acquisition, according to local sources cited in the report.


 

Categories:

Algemeen

Companies:

Millicom,  Telefonica

Countries:

Costa Rica

Tags:

Legislation - Lawsuits, M&A buyouts & divestments

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